Prime Minister Minister Turnbull last December revealed a comprehensive innovation agenda for Australia, launching an ‘ideas boom’ he declared will “help create the modern, dynamic, 21st-century economy Australia needs.” This is a new set of initiatives that sit beside and complement the existing popular R&D Tax Incentive.
In announcing the agenda, Turnbull said, “There has never been a more exciting time to be an Australian business. There have never been more opportunities on the horizon for Australians. The internet and the technologies it enables mean we are now part of a truly global marketplace. It means there are fewer barriers to entry for Australian businesses, no matter where they are located, right across Australia they can sell their products and services to just about every corner of the globe.”
The ‘pioneers’ of Australia’s startup ecosystem have, over the last decade, created innovative new businesses across almost every sector imaginable, doing things like creating online fashion businesses, building recruitment and staff management platforms, developing software to help teams collaborate better, and taking the first steps into emerging technologies such as virtual reality, the Internet of Things, and 3D printing.
With the focus now squarely on Australia’s so-called digital and tech economy, both the Federal Government and state governments around Australia are developing and enacting policies to help both these established startups and, in particular, aspiring entrepreneurs start up and scale globally. While access to mentorship and advice is key, money is also on the forefront of every founder’s mind, and in turn policies are focusing on this area.
For example, the Government this week announced long-awaited changes to tax legislation that will deliver benefits to angel investors. Targeting angel investors who put their money into high risk, early stage startup companies, the legislation will give concessional tax treatment to investors in an aim to promote the high growth potential of innovative startup companies and allow them to avoid regulatory hurdles.
Another initiative helping startups – and, indeed, any business – is the R & D Tax Incentive, an entitlement grant that helps innovative businesses offset and recoup some of the costs of doing research and development. The incentive, which allows businesses to claim back up to 40 cents in the dollar, is specifically aimed at spurring innovation.
And what does innovation, or ’research and development’, actually mean? The terms encompass quite a lot, and the first thing businesses should look to assess in order to determine whether their activities classify as research and development is whether what they are doing is entirely new, or in some way different to what someone else is doing. If startups are testing a new product because they did not know whether or not it would work, that is classified as research and development – even if all those tests failed.
PwC is doing its part to fuel the ideas boom through the release of its own new innovative tool, Nifty Forms. The system is designed for the startup stage, where every last dollar is crucial and copious amounts of paperwork belong in 1991. PwC’s Nifty R&D helps startups put together a claim, reviews it, and reduces the fees associated with the process.
This post is powered by Nifty Forms. The new way to complete your R&D Tax Incentive claim, helping hundreds of Australian startups receive cash back from the government through the R&D Tax Incentive.